On September 19, Apple Inc., revealed that the price of Apple App Store products and services will increase from October across the globe, including Japan, Malaysia, and all territories that use the euro currency.
The new prices, excluding auto-renew subscriptions for the App Store, will go into effect on October 5. The revised App Store rates are mainly intended for Asia and Europe, to counter weak local currencies against the US dollar.
An image of a person checking out the Apple App Store using an iPhone.How much does the Apple App Store charge?
In a message to developers, Apple Inc., said that customers in countries that use the euro as well as those in Sweden, Japan, South Korea, Chile, Egypt, Malaysia, Pakistan and, Vietnam will all see price hikes from October 5. The price hikes will be applicable to the prices of apps and in-app purchases from the Apple App Store.
The company specifically outlined the changes applicable in Vietnam as new tax laws, including value added tax (VAT) and corporate income tax (CIT) at 5% rates respectively, have been taken into account while drafting the revised App in App store fees. The company did not comment on why it is raising prices globally.
Apple has always taken a 30% cut from app developers who make over $1 million through Apps in the App Store. For smaller developers, with lesser earnings, it had cut its App store rates to 15% as part of the Small Business Developer program.
In the past, the App Store’s high rates have invited the wrath of several technocrats, with Tesla CEO Elon Musk even calling it “a 30% tax on the Internet.”
The company periodically adjusts its rates on the App Store based on currencies and taxes, to insulate itself from additional costs. Earlier the starting prices for euro zone countries hovered between 0.99 euro cents to 1.09 euros. The latest hike pushes the starting price up to 1.19 euros.
High interest rates, inflation, and an energy crisis across Europe has hammered the euro, which has dropped to two decade-lows this year.
Do all the apps on an Apple store cost money?
Not all apps on the App store cost money. Developers are required to pay Apple’s App Store only if they offer chargeable digital products or services. Over 80% of apps on the App Store are free.
The blanket 30% commission is applicable to the purchase of all digital goods and services on the App Store. Subscription commission falls to 15% after the first year. The company clarified that developers will be able to keep subscribers of any subscription services they offer at current price levels.
The Apple App Store is a major source of revenue for the tech company. Consultancy firm Apptopia estimated that the average price of in-app purchases rose 40% in July, in comparison to the same month in 2021.
“It is not the first time Apple is adjusting App Store rates, but this hike is a pretty hefty one,” said Tokyo-based analyst Serkan Toto told Business Insider. “It’s inevitable the price adjustment will be felt by app and game developers in the markets affected. People might be more hesitant to make in-app purchases now than ever, and developers might be forced to get more creative in terms of pricing in the future.”
The 30% standard commission is also taken by the Google Play Store and Amazon App Store. Samsung Galaxy Store charges 30% but the fee can be negotiated with the company. The Microsoft Store charges 15% standard commission on apps and 12% on PC games. It charges a 30% commission on all apps, games, and in-app purchases on Xbox consoles.
Apple has been vocal about building its services businesses, including the Apple App Store, instead of relying on its smartphones to bring in revenue. The company is reportedly developing a range of iPhones that appear to be waterproof. Its services business brings in almost $20 billion per quarter and has continued to grow rapidly over the years.
